Policy and Legal

As part of its “Manufacturing Wins” campaign to preserve pro-manufacturing tax provisions, the NAM hosted a roundtable this week with Reps. Carol Miller (R-WV) and David Kustoff (R-TN)—respectively the chair and a member of the Ways and Means Committee Supply Chain Tax Team.

Preparing for 2025: The Supply Chain Tax Team has jurisdiction over the corporate income tax rate. Tax reform reduced the corporate rate to 21%, spurring the creation of thousands of new manufacturing jobs—and the NAM is working with Congress to ensure the U.S. maintains a competitive corporate rate as policymakers debate next year’s “tax Armageddon.” 

Understanding the benefits: Rep. Miller emphasized that the dollars saved due to tax reform’s lower corporate rate have supported job creation, higher wages and the flourishing of local communities.

• As a business owner herself, she said she believes it’s important for members of Congress in charge of tax policy to understand the risks businesses take, the communities they support and the certainty they need to be successful.

Measuring the impact: Rep. Kustoff emphasized the importance of real-world data on the benefits of the lower corporate tax rate—from the number of jobs created to the work businesses have done to provide their employees with bonuses and higher wages.

• According to Rep. Kustoff, real-world metrics are important for educating policymakers about the need for action, as crucial, pro-manufacturing tax provisions are set to expire at the end of 2025.

Recognizing the ripples: The discussion also touched on the wider impact of tax increases on global supply chains and the broader U.S. economy.

• Participants noted that a higher corporate income tax rate’s ripple effects would hurt companies throughout the economy—even when those companies are pass-throughs and not explicitly affected by the corporate income tax rate.
• That’s because these small businesses often sell to and partner with larger corporations that would have less capital available under a higher corporate rate.

Our take: “Prior to 2017 tax reform, the U.S. had the highest corporate tax rate among the more than three dozen countries in the Organisation for Economic Cooperation and Development and the third highest in the entire world,” said NAM Vice President of Economic Policy Charles Crain.

• “That put manufacturers in America at an alarming disadvantage. A competitive tax rate helps business compete in the global economy, leads to job creation, investments and purchases of new equipment and allows manufacturers to give back to their communities.”
• “If Congress were to raise the corporate rate, it would force America to take a step back on the global stage—at a time when other countries around the world are implementing more competitive tax agendas.”

The NAM this week advocated the passage of two pieces of manufacturing-critical legislation, successfully driving the agenda of a Wednesday House Energy and Commerce Committee markup.

What’s going on: The committee—with the NAM’s strong support—approved two bills that address longstanding manufacturing priorities:

• A congressional resolution disapproving of the Environmental Protection Agency’s harmful PM2.5 rule
• A bill instituting important pharmacy benefit manager reforms

Reversing an unworkable PM2.5 standard: The EPA announced a new, more restrictive particulate matter standard in February, reducing allowable levels from 12 micrograms per cubic meter of air to 9 micrograms—despite a standard of 9 being “essentially background levels in some of the country,” as the NAM has pointed out.

• “Manufacturers have sharply reduced particulate matter emissions, or PM2.5; as a result, industry in the United States has some of the cleanest and most efficient operations in the world,” NAM Vice President of Domestic Policy Chris Phalen told the committee.
• “Now, the vast majority of emissions are from sources well outside of our control, with fires, dirt roads and other nonpoint sources accounting for 84% of PM2.5 emissions,” Phalen continued. “[T]he EPA’s rule will make it more difficult for states to issue permits for the construction of new facilities or expansions of existing factories.”
• The committee’s PM2.5 resolution, offered under the Congressional Review Act, seeks to overturn the EPA’s unworkable standard.

Reforming PBMs: PBMs are unregulated middlemen whose business practices drive up health care costs for manufacturers and manufacturing workers.

• “By applying upward pressure to list prices that dictate what patients pay at the pharmacy counter, pocketing manufacturer rebates and failing to provide an appropriate level of transparency about their business practices, PBMs increase health care costs at the expense of all patients in America,” NAM Vice President of Domestic Policy Charles Crain said.
• Provisions in the NAM-supported Telehealth Modernization Act would increase transparency into PBMs’ business practices and delink their compensation from medicines’ list prices.

The last word: “Manufacturers commend the Energy and Commerce Committee for approving these important bills, which will reduce costs and enhance growth at manufacturers across the country—allowing our industry to continue to create jobs here at home and drive U.S. competitiveness on the world stage,” said NAM Managing Vice President of Policy Chris Netram.

To lower drug prices, Congress should undertake comprehensive reform of pharmacy benefit managers, not embrace price controls, the NAM told the Senate Tuesday.

What’s going on: “Biopharmaceutical manufacturers are a critical part of the manufacturing economy,” NAM Vice President of Domestic Policy Charles Crain said ahead of a Senate Finance Committee hearing on health care costs.

• In 2021, biopharmaceutical firms “accounted for $355 billion in value-added output to the U.S. economy … and directly employed 291,000 workers in the United States, with each of these jobs supporting an additional 4.1 jobs.”
• Crucially, biopharma companies are also responsible for the dozens of groundbreaking, lifesaving medications brought to patients annually.
• But their continued innovation and economic impact are under attack by both Inflation Reduction Act–mandated drug price controls and the largely unchecked actions of PBMs, Crain continued.

Threats to innovation: Instead of benefiting patients, “the IRA pricing mandates announced last month by the Department of Health and Human Services will … limit the capital manufacturers have available to put toward the astronomically high costs of developing a new medicine,” Crain told the committee, adding that the uncertainty introduced by price controls is also likely to dissuade early-stage investment in new treatments.

• Rather than impose further price controls, Congress should address the influence of PBMs, largely unregulated middlemen that “contribute to the skyrocketing cost of health care by applying upward pressure to list prices that dictate what patients pay for medicines at the pharmacy counter, pocketing manufacturer rebates and failing to provide an appropriate level of transparency about their business models.”

PBM reform: To truly lower health care costs, Congress must rein in PBMs, Crain said. The NAM has called on Congress to adopt specific PBM reforms, including:

• Increased transparency into PBMs’ business models;
• Rebate passthrough to ensure that 100% of negotiated savings get passed on to health plan sponsors and employees; and
• Delinking of PBM compensation from medication list prices.

The last word: “Instead of further embracing price controls, it is imperative that Congress act to lower drug prices by reining in PBMs’ problematic business practices and minimizing their ability to further damage the U.S. health care system,” Crain said.

• “All Americans deserve access to high-quality, affordable health care, and PBM reform is an impactful step toward this goal.”

Washington, D.C. – Following the U.S. Trade Representative’s announcement on the continuation of Section 301 tariffs on China and the White House’s announcement on de minimis, National Association of Manufacturers Vice President of International Policy Andrea Durkin released the following statement:

“A trade war never benefits anyone, and this announcement ignores the realities of today’s economy, potentially harming manufacturers’ ability to grow and invest in the U.S. Manufacturers operate in a rapidly shifting global economy, where tariffs have the potential to affect every industry and every product. To stay competitive, manufacturers must have the flexibility to apply for exclusions as market dynamics change. Without this process, companies of all sizes will be crippled by rigid policies that stifle growth and innovation.

“Raising the cost of critical clean energy inputs, without offering a process for exclusions, directly undermines the Biden administration’s goal of boosting clean energy manufacturing in the U.S. Policymakers must ask tough questions: Are we issuing permits for more domestic aluminum smelters and critical minerals refining for energy production applications? Will wafer and battery production be exempt from regulatory hurdles to ensure automotive and high-tech manufacturing is not slowed? The White House also announced today it will propose a rule significantly altering how goods enter our borders under de minimis, subjecting hundreds of millions of additional packages to scrutiny by CBP—which raises the question of how we will ensure that manufacturing supply chains are not disrupted by this massive new burden on the agency charged with protecting our ports of entry.

“These questions all point to one fact—that tariffs often fail to address the underlying problems they’re supposed to solve, while often complicating manufacturers’ efforts to improve the quality of life for everyone. We are asking the administration to implement an exclusion process that fairly accounts for the unintended consequences of tariffs on our industry’s ability to create jobs and reach the 95% of customers around the world.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Rep. Randy Feenstra (R-IA), the vice chair of the House Ways and Means Committee’s Rural America Tax Team, is working to shield family businesses across America from damaging tax burdens by targeting the estate tax for repeal.

As part of the NAM’s “Manufacturing Wins” campaign, which aims to protect pro-manufacturing provisions from 2017 tax reform set to expire in 2025, the NAM spoke with Rep. Feenstra about his work and why it matters to manufacturers. 

Nixing the tax: Tax reform doubled the valuation threshold under which family-owned businesses’ assets are exempt from the estate tax. While Rep. Feenstra is working to prevent that increased threshold from expiring, he has a bigger goal in sight: repealing the estate tax altogether.

• Feenstra is the sponsor of the Death Tax Repeal Act, which “makes the simple recognition that death should not be a taxable event,” he told us.
• “When a family is grieving, the federal government sends a multimillion-dollar tax bill as condolences. This is simply wrong.”

Listening to owners: Rep. Feenstra and his colleagues on the tax team have spoken to family businesses across the country, including manufacturers. These conversations have made it clear that “we still have a lot of work to do to provide relief from what can be a devastating setback for multigenerational family businesses,” he said.

• “Repealing this tax is going to be one of my top priorities in 2025, and I’m proud to have the support of 170 of my colleagues,” he added.

Persecuting small business: As Rep. Feenstra explains, the estate tax often threatens to destroy small manufacturers, whose value is often tied up in illiquid assets like equipment and facilities.

• “People often don’t realize that businesses over many generations can accumulate assets that can put them over the asset threshold, but that doesn’t mean these businesses have a lot of cash on hand,” he explained. “So, when they’re hit with millions in new taxes, that can sink an already cash-strapped business.”
• “Fortunately, because of the doubling of exemption amount, far fewer businesses face that threat,” he added. However, “As long as any family business does face that threat, we still have work to do.”

If tax reform expires… Rep. Feenstra warns that if tax reform’s estate tax changes expire, many additional smaller businesses will suffer.

• “A lot more people would be hit by the death tax, and the people who are hit would be paying a much higher tax,” he said.
• “These are small family businesses we are talking about, and if the current exemption amount is allowed to return to half its current value, that means the size of the businesses getting hit are much smaller than they are today.”

The last word: “As we go into 2025, we need to be focused on policies that support growth and help [family-owned] businesses succeed, not create costly obstacles for them to overcome,” Rep. Feenstra concluded. 

Learn more: You can read our full Q&A with Rep. Feenstra here and learn more about the NAM’s “Manufacturing Wins” tax campaign at NAM.org/MfgWins.

The NAM recently interviewed Rep. Randy Feenstra (R-IA), the vice chair of the House Ways and Means Committee’s Rural America Tax Team, about the estate tax and why he’s working with colleagues on Capitol Hill to repeal it.

NAM: Rep. Feenstra, Congress is facing a “Tax Armageddon” next year, as crucial provisions from 2017’s Tax Cuts and Jobs Act are set to expire. As a member of the Ways and Means Committee, what is your focus moving into next year’s debate? 

Rep. Feenstra: One of those crucial provisions from the Tax Cuts and Jobs Act that is set to expire is the doubling of the estate tax exemption amount, which currently sits at $13.6 million in 2024. After 2025, it will return to half that amount, adjusted for inflation. That change in the Tax Cuts and Jobs Act was another important step toward full repeal of the estate tax, which my Death Tax Repeal Act would do. The bill makes the simple recognition that death should not be a taxable event. When a family is grieving, the federal government sends a multimillion-dollar tax bill as condolences. This is simply wrong.

I’m proud to co-chair the Rural America Tax Team, which has dug into this issue of the “death tax” and the impact it is having on family businesses across the country. As the tax team has spoken to family businesses and estate tax experts from across the country, it’s become increasingly clear that we still have a lot of work to do to provide relief from what can be a devastating setback for multigenerational family businesses. Repealing this tax is going to be one of my top priorities in 2025, and I’m proud to have the support of 170 of my colleagues. 

NAM: The estate tax is imposed on family-owned businesses when ownership of the business passes to the next generation following the death of an owner. As you mentioned, the TCJA doubled the exemption threshold, excluding more assets from taxation and thus reducing the burden of the estate tax on businesses. Why is this important and what is Congress doing to preserve this higher threshold? 

Rep. Feenstra: Over the years, various bills have taken steps toward providing relief for taxpayers hit by the death tax. The Tax Cuts and Jobs Act was one of the largest expansions of that relief, significantly reducing the number of family businesses hit by the tax and reducing the tax burden for those businesses that still are. People often don’t realize that businesses over many generations can accumulate assets that can put them over the asset threshold, but that doesn’t mean these businesses have a lot of cash on hand. So when they’re hit with millions in new taxes, that can sink an already cash-strapped business. Fortunately, because of the doubling of the exemption amount, far fewer businesses face that threat. As long as any family business does face that threat, we still have work to do. 

NAM: At the end of 2025, the estate tax is scheduled to be reduced by half, subjecting more of family-owned manufacturers’ assets to taxation and increasing their estate tax liability. As the Ways and Means Committee and tax teams continue meeting with businesses around the country, what are you hearing on the impact this change would have? 

Rep. Feenstra: Two things: A lot more people would be hit by the death tax, and the people who are hit would be paying a much higher tax. These are small family businesses we are talking about, and if the current exemption amount is allowed to return to half its current value, that means the size of the businesses getting hit are much smaller than they are today. People often think of farms, and that’s certainly true, but as you know, manufacturers are hit, family-owned restaurants, auto dealers, you name it. As we go into 2025, we need to be focused on policies that support growth and help these businesses succeed, not create costly obstacles for them to overcome. If the exemption amount falls to its pre–Tax Cuts and Jobs Act level, that’s a lot of new businesses that are going to be hit by this tax.

A draft Department of Homeland Security rule requiring that certain sectors expedite cyber-incident reporting has several shortcomings that must be addressed before the rule becomes final in the fall of 2025, the NAM told Rep. Andrew Garbarino (R-NY) in a meeting this week.

What’s going on: Rep. Garbarino, chair of the House Homeland Security Subcommittee on Cybersecurity and Infrastructure Protection, met with manufacturers and the NAM Technology Policy Committee Tuesday to talk cybersecurity issues.

• Much of the discussion focused on draft rulemaking published in April by the DHS’s Cybersecurity and Infrastructure Security Agency. It would require “covered entities” in “critical infrastructure sector[s]” to report any major cybersecurity incidents to CISA within 72 hours.
• Under the Cybersecurity Incident Reporting for Critical Infrastructure Act, CISA must finalize the rule by October 2025.

Why it’s a problem: The NAM agrees with the concerns Rep. Garbarino raised with CISA, including:

• The burden associated with imposing onerous reporting mandates on companies recovering from cyberattacks;
• An overbroad scope, which forces into compliance both organizations that are not truly “critical infrastructure” and those that are too small to have the resources needed to complete the required actions;
• An overbroad definition of incidents requiring reporting;
• An excessive amount of required information;
• An unreasonably high cost of compliance and the diversion of resources away from cyber-incident response; and
• The risk that the proposed rule will jeopardize CISA’s role as a trusted partner of industry.

NAM in action: The NAM submitted comments in response to CISA’s proposal earlier this year outlining these concerns, as well as calling for a reduction in both the number of entities required to file incident notifications and the number of incidents they have to report.

The NAM says: “CISA needs to significantly rethink its approach to CIRCIA’s implementation,” said NAM Senior Director of Technology Policy Franck Journoud.

• “The proposed rule requires far too much information about far too many incidents from far too many companies. CISA should not mandate that companies under attack from hackers divert precious security resources to generate mountains of incident data that CISA will not have the means to process or act upon.”

Take precautions: If you are looking to strengthen your company’s cyber protections, check out NAM Cyber Cover, an affordable, broad security program for NAM members that provides proactive monitoring with automated alerts at no extra cost.

Congresswoman Lori Chavez-DeRemer (R-OR) visited Miles Fiberglass & Composites in Clackamas, Oregon, for a roundtable discussion with local manufacturers and other business leaders on the critical need to protect manufacturing-friendly tax policies. Moderated by Miles Fiberglass President and owner and NAM board member Lori Miles-Olund and attended by representatives of the NAM and Oregon Business & Industry, the discussion centered on the importance of preserving the 2017 Tax Cuts and Jobs Act, which has been a lifeline for small manufacturers. 

Stimulating growth: “The 2017 Tax Cuts and Jobs Act freed up capital for us to hire more people, invest in new equipment and increase wages,” said Miles-Olund. “It’s essential for manufacturers like us to have a pro-growth tax code that allows us to stay competitive and innovate.”

• The 2017 reforms lowered the corporate tax rate and provided a 20% pass-through deduction for small businesses, boosting their growth for the past seven years.
• However, with key provisions set to expire in 2025, many manufacturers are concerned about the harm to their businesses if Congress fails to act.

A looming threat: Rep. Chavez-DeRemer addressed the impending expiration of these tax provisions, saying, “We cannot afford to return to a tax system that punishes manufacturers for investing in the U.S.”

• She also highlighted the economic ripple effects of tax hikes, noting that when manufacturers are forced to scale back investments, it affects not just their operations but also their suppliers and communities.
• OBI President and CEO Angela Wilhelms echoed these concerns. “Preserving these tax reforms is essential to ensuring that Oregon businesses remain competitive on a global stage,” she said.

Empowering women: Rep. Chavez-DeRemer also discussed the importance of empowering women in the manufacturing sector. She praised Miles Fiberglass’ efforts to recruit more women, adding that legislation like the National Apprenticeship Act can help open doors for women and close the skills gap in manufacturing. 

The last word: “We need policies that allow manufacturers to thrive,” Rep. Chavez-DeRemer said. “Congress must prioritize protecting jobs, ensuring economic stability and keeping American manufacturing competitive.”

If you want to add your voice to the fight for tax reform, or host legislators for a facility visit, check out the NAM’s “Manufacturing Wins” campaign.  

Passing on the family business can also mean passing on a big tax bill, and family-owned manufacturers are speaking out to keep those bills from getting any bigger. 

What’s happening: As part of its “Manufacturing Wins” campaign to preserve 2017 tax reform, the NAM is calling on Congress to secure the law’s changes to the estate tax.

• Tax reform increased the estate tax exemption threshold, which protects some of a family-owned business’s assets from the tax.
• The threshold is set to be slashed in half at the end of 2025, subjecting more of family-owned manufacturers’ assets to taxation and making it harder for them to pass their business on to the next generation.

Protecting physical assets: Manufacturers constantly invest in physical assets like facilities and machinery to stay competitive, making the estate tax especially damaging.

• “We’re not a liquid company,” said Tom Tredway, president of Erie Molded Packaging in Pennsylvania. “Almost every penny we earn is poured back into our business so we can grow and compete. The increased estate tax exemption threshold is set to expire at the end of 2025, which will threaten my ability to pass the business on to my children.”
• “The estate tax doesn’t just hurt family businesses—it hurts the workers,” added Scott Livingston, president and CEO of HORST Engineering in East Hartford, Connecticut. “It also hurts our customers and the communities that we serve.”

Preserving company values: For Click Bond, a family-owned adhesives manufacturer in Carson City, Nevada, paying a higher estate tax bill could mean compromising the business’s vision and values.

• “We may have become a family business by happenstance, but we remain one by strategy,” said CEO Karl Hutter. “With reduced lifetime estate tax exemptions, family businesses will face the threat of having to liquidate, divest or take in outside capital that may not align with their strategy or values simply to create liquidity to pay a tax bill.”
• “The estate tax rips financial resources from productive organizations,” said Dave True of the 76-year-old True Companies in Casper, Wyoming. “These financial resources are critical to small companies and the families they support.”

Saving livelihoods: For some families, the estate tax threatens to turn a death in the family into the death of the business.

• “When I lost my husband to brain cancer, not only did I have to worry about keeping the business afloat, but I also had to worry about a looming tax bill that might have forced us to halt production altogether,” said Courtney Silver, president and owner of Ketchie, Inc. in Concord, North Carolina.
• Silver, who chairs the NAM’s Small and Medium Manufacturers Group, continued: “If not for the federal estate tax exemption being increased in 2017, Ketchie might not be here today.”

The last word: Lori Miles-Olund, the third-generation owner and president of Miles Fiberglass & Composites, Inc. in Clackamas, Oregon, put it simply: “Congress must preserve the increased estate tax exemption to protect family-owned businesses like ours from potential insolvency when the owner passes away.”